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How to deal with defective product from overseas manufacturer?

We do a third party quality inspection of each production run prior to it shipping. This may catch a few defective products, but the inspection only covers a sample of the entire production run. So later on down the road some percentage will be returned by our customers due to being defective.

Our plan is to catalog each defective product so we can notice patterns and issue corrective actions to fix any manufacturing issue.

But how do we handle the money side of it between us and our manufacturer? Is it common place to request a credit for the dollar amount on the next production run? Surely this is a common issue, so we’d be curious to see how others handle this?

submitted by /u/bennerj
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